NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Sovereign Debt Restructurings: Panacea or Pangloss?

Jeremy I. Bulow, Kenneth Rogoff

NBER Working Paper No. 2637
Issued in June 1988
NBER Program(s):   ITI   IFM

The most widely proposed LDC debt plans are flawed by their failure to recognize the fundamental differences between corporate and sovereign debt. Consequently, many plans intended to help highly-indebted countries mainly aid their foreign creditors. This paper emphasizes the crucial distinction between marginal and average sovereign debt. This distinction provides the cornerstone for an understanding of debt buybacks, debt-equity swaps, and debt-for-debt swaps involving new classes of seniority. Highly indebted countries would benefit more from direct transfers than from the same resources spent on any of these financial engineering schemes.

download in pdf format
   (404 K)

email paper

This paper is available as PDF (404 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2637

Published: "The Buyback Boondoggle" Brookings Papers on Economic Activity, No. 2, pp. 675-698, (1988).

Users who downloaded this paper also downloaded these:
Bulow and Rogoff w2623 Sovereign Debt: Is To Forgive To Forget?
Bulow and Rogoff w2850 Sovereign Debt Repurchases: No Cure for Overhang
Shleifer w9493 Will the Sovereign Debt Market Survive?
Eaton and Fernández w5131 Sovereign Debt
Bolton and Jeanne w11071 Structuring and Restructuring Sovereign Debt: The Role of Seniority
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us